The two expressions that sum up the agility and fragility of the tourism and hospitality industry are: Good Things Come in Waves and When it Rains; It Pours.
Compared to the healthcare and education sectors, the tourism and hospitality industry is vulnerable to economic headwinds, conflicts, and pandemics. However, when normalcy prevails, growth in the tourism industry is fast and in abundance.
According to the United Nations, international tourism is back in the game and has recovered fully in 2024 – even witnessing two percent more growth than the pre-pandemic levels of 2019. Not only this, the number of travel and tourism jobs stood at 334 million worldwide, and in 2024, the number of jobs in the sector is estimated by the World Travel and Tourism Council (WTTC) to reach 348 million, eventually reaching 449 million jobs by 2034.
In its 2024 Economic Impact Trends Report released in September, WTTC indicated a solid recovery of the tourism sector. It says the United States emerged as the world’s most powerful travel and tourism market, contributing a record-breaking US$2.36 trillion to the nation’s economy last year.
According to the United Nations, international tourism is back in the game and has recovered fully in 2024 – even witnessing two percent more growth than the pre-pandemic levels of 2019.
WTTC highlights the fact that despite the slow return of spending from international travelers, the US keeps pole position, with almost double the economic contribution of its nearest rival – China. The tourism sector contributed US$1.3 trillion to China’s GDP in 2023.
The travel and tourism sector contributed US$487.6 billion to Germany’s economy, US$297 billion to Japan’s, US$295.2 billion to the United Kingdom’s, and US$264.7 billion to France’s, according to the WTTC.
Mexico’s tourism industry contributed US$261.6 billion to its economy, while India (US$231.6 billion), Italy (US$231.3 billion), and Spain (US$227.9 billion) were the other major players.
Commenting on this stupendous recovery, WTTC President and CEO Julia Simpson, said: “As we look forward to a record-breaking 2024, it’s clear that the travel and tourism [sector] is not only back on track, but also set to achieve unprecedented growth.”
According to the WTTC report, many key destinations have profited from a surge in international spending in 2024, compared to pre-pandemic levels, with Saudi Arabia up 91.3 percent compared to 2019. Türkiye (+38.2 percent), Kenya (+33.3 percent), Colombia (+29.1 percent), and Egypt (+22.9 percent) leading the way.
Globally, international visitor spending is set to grow in 2024 by nearly 16 percent to reach US$1.9 trillion, while domestic tourists are projected to spend more than ever before, reaching US$5.4 trillion, an increase of 10.3 percent over 2019 levels.
Let’s shift away from these numbers and focus on one of the most significant drivers of growth of the tourism industry – new technologies. From being the biggest disruptor, smart technologies, including AI, have become a major contributor toward the recovery of the tourism sector.
Digital technologies, particularly, are playing a crucial role in this recovery, enabling businesses to adapt to changing consumer behaviors and preferences. From planning and making itineraries, to contactless check-ins, mobile payments and customized experiences with the help of data analytics, the tourism industry’s adoption of new tech has been a widespread catalyst of accelerated growth.
Online platforms and mobile applications have revolutionized how travelers plan, book, and experience their trips. According to Statista, the global online travel market is projected to reach $690 billion by 2030. Mobile apps for booking hotels, flights, and activities provide convenience, increasing customer satisfaction and bookings.
Companies like Expedia, Booking.com, and Airbnb have flourished by offering personalized, easy-to-use platforms, allowing consumers to tailor their trips with minimal effort.
The Artificial Intelligence (AI) is being used to enhance customer service through chatbots, personalized recommendations, and dynamic pricing. Hotels and travel companies use AI to analyze customer behavior, preferences, and trends, providing personalized experiences that improve customer retention and engagement. AI-powered chatbots are handling millions of customer service inquiries, making interactions more efficient.
The global AI market in travel and hospitality is expected to be $1.21 billion by 2027, highlighting the increasing adoption of AI to streamline services.
The hospitality and tourism industry is leveraging big data to optimize operations, predict customer preferences, and improve marketing strategies. By analyzing vast amounts of data on consumer behavior, businesses can create more bespoke offers, optimize pricing, and improve overall guest experiences based on real-time insights.
Airlines and hotels are already using big data analytics and algorithms to anticipate booking patterns and adjust prices, accordingly, maximizing revenue. For instance, all major airlines use data analytics to predict flight delays and to resolve customer issues proactively.
The global AI market in travel and hospitality is expected to be $1.21 billion by 2027, highlighting the increasing adoption of AI to streamline services.
The implementation of the Internet of Things (IoT) is quite popular with guests who are digital natives. The IoT enables “smart” hotels, where devices and systems are interconnected for greater efficiency and customer comfort. IoT technology helps hotels provide personalized room settings, such as lighting, temperature control, and entertainment, all managed via mobile apps or voice commands, including digital keys to hotel rooms on smartphones.
Some hotel chains have installed devices such as Amazon’s Alexa allowing guests to request services, get information, and manage room facilities with voice commands.
The digital transformation wave also allows tourism businesses to reach out to their consumers more efficiently – a prime example is social media. For the marketing and sales teams, social media has become a critical tool for tourism and hospitality marketing, as travelers increasingly rely on platforms such as Instagram, YouTube, and TikTok for inspiration. Influencers and content creators play a vital role in shaping travel trends, and brands are partnering with them to reach wider audiences.
With an increasing reliance on AI, VR/AR, big data, and blockchain, tourism businesses are optimizing their operations, improving customer experiences, and expanding their market reach. As these technologies continue to evolve, they will most certainly shape the future of the travel and tourism industry, creating new opportunities for growth and innovation.
If tourism stakeholders can capture the tech opportunities efficiently, their businesses are likely to become more resilient in the future.
(The author is a senior journalist based in Toronto, Canada, and is the Executive Editor and Chief Growth Strategy Officer at Special Edition – a UAE-headquartered international content management and creation firm)
Disclaimer: The views and opinions expressed in this Op-Ed are solely those of the author and do not necessarily reflect the official policy or position of TRENDS.